Theaters want more pop from your wallet

Movies: Operators are searching for unconventional ways to make money, from concert simulcasts to more ads.

April 11, 2004|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

In Los Angeles, a screaming sold-out crowd that included the comedian Eddie Murphy and teen pop star Hilary Duff shrieked even louder when the musician Prince, wrapped in a pink-and-fuchsia suit, moaned "Dearly beloved" -- the first words of his 1985 gold record, "Let's Go Crazy."

Nearly 3,000 miles away, a few hundred Prince fans -- although no celebrities in sight -- crammed two movie theaters in Columbia to react with their own hoots and hollers to a simulcast of Prince's show on the West Coast.

That was a recent Monday, traditionally a slow night for theaters. But Regal Cinemas, attempting to turn lemons into lemonade, arranged a simulcast of the Prince concert to fill seats at 40 of its theaters, including the Snowden Square 14 in Columbia.

Movie theaters traditionally have made most of their profits through concession sales. But faced with rising costs, sluggish ticket sales and intense competition within the $10 billion industry, they're trying to devise new ways to make money. Megaplexes that became popular almost a decade ago are more expensive to run than the smaller theaters and often find themselves playing to sparse audiences weeks after the opening of all but the biggest blockbusters.

Producing a movie has also skyrocketed in cost, prompting Hollywood to demand a larger share of the box office, theater executives said. A lead star's salary can equal the cost of making an entire movie a decade ago.

"If you go back 20 years ago, a $10 million budget for a film was high. Today, that is nothing," said Jim Lee, director of marketing for Muvico Theaters Inc., the Fort Lauderdale, Fla.-based owner of the Egyptian-themed theaters at Arundel Mills. "It's not anything to hear that a film cost $25 [million] or $50 million to make. In the end, the film company wants a higher percentage of the gate."

Key figures down

Despite the allure of films such as The Lord of the Rings: The Return of the King, Finding Nemo and two sequels of The Matrix last year, admissions and ticket revenue fell nationwide. That was the first simultaneous drop in those two statistics since 1991.

"Most theaters aren't getting rich on ticket revenue," said Cliff Marks, president of marketing and sales for Regal. "The majority of that revenue is going back to the movie companies."

To be sure, theater operators aren't in the state of flux of a few years ago when they battered one another into bankruptcy court by overbuilding enormous facilities. The number of screens increased 58 percent between 1996 and 2000, according to American Demographics magazine. People stopped going to the smaller theaters, but the theater companies were stuck in leases and couldn't close them. Many of the companies filed for protection from creditors under Chapter 11.

CDs with your soda

Now, operators are looking at ways to cushion their bottom line. Among the new revenue streams: airing more sophisticated commercials before movies, adding beer as a concession item, putting advertisements -- even CDs -- on soda cups, and having ushers pass out free samples of products.

Colorado-based Regal began simulcasting live and pre-recorded concerts three years ago. Sheryl Crow, Linkin Park, KISS, Tom Petty and Gloria Estefan have all appeared on its screens. The movie company has also aired major league soccer games and college football games, and rented out space for church services and business meetings.

Loews Cineplex Entertainment of New York fills up some of its venues during the sluggish daytime hours by promoting screening specifically to parents with young children, who otherwise might avoid theaters.

Muvico even offers babysitting services to parents in the hope they won't stay home and rent a DVD. The company is also offering food choices such as chicken strips with fries in an attempt to boost concessions. Its Boca Raton, Fla., theater has a full-service restaurant. Muvico is experimenting with a system that enables people to order their snacks electronically to speed food sales.

The changes aren't all winning thumbs-up reviews.

A class-action lawsuit filed in Chicago last summer against Loews claims that movie companies are deceiving consumers by showing a block of ads after a movie is scheduled to start. The lawsuit asks for $75 a moviegoer to compensate for lost time.

"The argument is that I'm not going to the movies to sit in front of the television," said Matthew Grimm, a columnist with American Demographics who has researched the issue. "I paid 10 bucks to get something I don't see at home."

But advertisers like the trend, which ensures a captive audience and no channel surfing.